Egyptian billionaire Naguib Sawiris is leading businessmen back into politics after the revolt that toppled president Hosni Mubarak also brought the downfall of several wealthy entrepreneurs.
The head of cellphone network Orascom Telecom is blunt about his aims. His newly founded Free Egyptians Party would promote capitalism, “attract honest businessmen who create jobs” and challenge the Muslim Brotherhood, the frontrunner in September’s election, Sawiris said last month.
“We don’t agree that the word businessmen should be an insult,” said Sawiris, who is worth $3.5 billion (R24bn) according to Forbes magazine.
Millions of Egyptians who took to the streets demanding Mubarak’s removal blamed the country’s tycoons as well as its president for corruption and poverty. After Mubarak’s February 11 overthrow, graft investigations, labour and political disputes brought many businesses to a standstill, sent Egyptian shares plunging and reduced foreign investment to a trickle.
The economy shrank 7 percent in the first quarter from the previous three months, as exports and tourism revenue slid and firms went bankrupt, Finance Minister Samir Radwan said on April 20.
That is the backdrop for what contestants say will be Egypt’s first free election, for which Sawiris’s party and rivals are handing out leaflets and placing ads in the media.
Sawiris is not the only business leader to get involved.
Hisham el-Khazindar, the co-founder of private equity firm Citadel Capital, is among the financiers of the Justice Party, and Nabil Deabis, whose family business ranges from education to the media, is forming a party called Modern Egypt.
Their shared problem is “how to rebuild the image of wealthy entrepreneurs”, says Moustafa el-Husseini, the author of Egypt on the Brink of the Unknown. “Part of this is to portray themselves as the last line of defence against Islamists and chaos.”
It’s a theme that Sawiris hammers on. On May 14 he said like-minded parties should form a coalition to face the Brotherhood, the biggest opposition group under Mubarak. Ten days later in Rome, he said he would give a “large part” of his time to politics in Egypt “so it’s not hijacked by extremists”.
While that may appeal to some voters, Sawiris still needs to promote policies that do not widen the gap between the rich and poor or feed the suspicion they are using politics for personal gain, say analysts.
It’s a goal that eluded the millionaires-turned-politicians who shaped the economic policies of the past decade. The government of Ahmed Nazif, who is now in prison pending a trial on corruption charges he denies, attracted record investment from companies such as BP and Italy’s Intesa Sanpaolo.
Egypt’s benchmark EGX 30 stock index, which has dropped 23 percent this year as revolts swept the Middle East, gained about 400 percent between July 2004, when Nazif took office, and the end of 2010.
That boom under Nazif, though, was not matched by rising living standards for most Egyptians. Data show that 40 percent of Egypt’s 80 million people live at or below the UN poverty line of $2 a day.
Critics of the Nazif government, including the Brotherhood, say it doled out cheap land to property firms to build luxury homes, and failed to protect the poor from inflated food prices, which have risen 20 percent in the past year.
Conflict of interest is another issue. “The presence of businessmen in political life is legitimate,” says Moustapha Kamel el-Sayyed, a political science professor at Cairo University. “But in the past period you had people in charge of ministries” who also owned companies in the same line of work.
Without measures to prevent that, “the door is open to use wealth to get political influence illegally”.
Rules for forming political parties drawn up in March by Egypt’s interim military rulers do not limit donations, adding to concerns that wealthy Egyptians may influence decisions.
The sharpest disagreements between the Brotherhood and business-backed parties may be over social policy rather than the economy. The Brotherhood calls for a free, competitive economy in its draft platform. It counts some wealthy members among its top leadership.
Sawiris’s Free Egyptians Party and similar groups are appealing to voters who see the Brotherhood’s refusal to endorse the candidacy of women and Christians to the presidency as a sign that it would try to impose Islamic lifestyles.
Mohamed Talaat, a corporate executive, has backed Sawiris. “The problem in the past was corruption, not capitalism,” he says. “I am a liberal and a capitalist and there is nothing wrong with that.”
Sawiris shares his view. “Busy writing the economic programme of the party,” he tweeted on May 22. “Not sure left-wingers will like it.” – Bloomberg